Indian Hotels gets majority stake in Sea Rock owner

ET Bureau|

Jun 13, 2009, 12.00 AM IST

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MUMBAI: Indian Hotels Company (IHCL) will acquire a controlling stake in closely-held Elel Hotels and Investments for Rs 680 crore. Elel is a subsidiary of Delhi-based Claridges Hotel Private that holds the lease for the land on which Sea Rock hotel is located in Mumbai.

In a press statement issued on Friday evening after market hours, IHCL, a Tata group company which owns the Taj group of hotels, said it already has an existing arrangement with Claridges (starting January 2009) to provide technical and management expertise for the restoration and operations of Sea Rock hotel, when the redevelopment of the property is completed.

���It is now proposed to demolish the existing structure as site and redevelop the area as a high-end world class luxury hotel/convention centre with retail facilities,��� added the statement. IHCL already owns the Taj Lands End which is situated across the road from Sea Rock. The intention was to fully integrate Sea Rock with Lands End in a synchronised manner.

ET had reported in its edition dated April 23 this year that Indian Hotels was in dialogue with Claridges to acquire Sea Rock. ET had also reported all the details announced on Friday, including the integration between Sea Rock and the Lands End property.

The hotel was badly damaged in the Mumbai bomb blasts in 1993 and was bought over by Claridges in 2005. The Claridges group is owned by Suresh Nanda, an industrialist based in Delhi.

Sea Rock was one of Mumbai���s best known landmarks and is located in Bandra, an upmarket suburb. It could never reopen after the bomb blast largely because of disputes between its owners. The hotel had over 400 rooms while the Taj Lands End has 368 rooms. Sea Rock is closer to the sea and is considered to have a better view than the existing Lands End property.

���We believe that considerable synergies can be generated by an association with the Sea Rock hotel, which when the reconstruction is completed will enable the combined operation to have a leading position in North Mumbai��� said IHCL���s statement. The company will fund the buyout through last year���s rights issue. On Friday, IHCL���s stock shed 3.46% or Rs 2.70 to end the day at Rs 75.40.

Apart from Lands End, IHCL owns the iconic Taj Mahal Palace and Tower and the Taj President in south Mumbai. The Lands End property was acquired by Indian Hotels in September 2002 from the Mumbai-based Lokhandwala group for Rs 415 crore. At that point in time, the property was known as Regent Hotel.